An increase in car sales in the month of April helped cushion overall level of retail sales - The Straits Times reported. Retail shops reported a 0.5 percent drop in sales for the month of April - compared to the same period a year ago. Still, this is under the three percent drop projected by economists.

Part of the reason was accounted to the lift in temporary loan restrictions for used car buyers and the reduced prices of new cars in general. This also contributed to a 36.1 percent increase in sales of motor vehicles in the month of April.

On a month-on-month basis, retail sales improved by 5.3 percent in April compared to a 5.5 percent drop in March. However if motor vehicle sales were excluded from the figures, then retail sales would have dropped 0.9 percent in April.

Besides cars, the increase in retail sales came from shoppers spending more at supermarkets, food and beverage outlets, as well as watch and jewellery shops - while apparels, petrol, furniture and household equipment reported lower takings in April over a year ago.

With the job market still favourable for workers, Citibank economist Kit Wei Zheng claimed that consumer spending should stay firm and support the economy's growth this year. However he also cautioned the tight supply of labour could allow companies to pass additional costs to consumers, making goods and services more expensive.